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So, I got a prison sentence for 'copying' – what did that mean exactly?


Last Friday, I was sentenced to 60 days in prison (suspended) by the Helsinki district court. And, on top of that, I was slammed with gargantuan legal fees to pay.

I was convicted for a crime called “violation of a business secret”, yrityssalaisuuden rikkominen. I was quite surprised and baffled by the verdict.

On top of that, there’s been a lot of press publicity on the verdict lately, mostly based on Lunchie’s press releases, so you can guess how they are leaning and how they are formulated (see part 1 a).

As always, I’d have a lot to say – on the verdict, the articles, and all the spurred discussion – and I, too, could write a long emotional story of all the incredible turns of events. But I’ll try to focus on the most critical clarifications for now. The whole, 32-page verdict itself is definitely worth reading as well.

TL;DR:

There are, imho, three separate issues in this mess:

1. The Facts: What happened? And what does the verdict say? (a) Much of the press has been giving quite a misleading representation of the contents of the verdict. (b) The verdict might have been notably influenced by some untruths.

2. The Law: Was what I did a crime? And if so, what does that imply for the future? It’s important to understand the law in question – and how the law was interpreted. As a precedent, it could have widespread implications for entrepreneurship as well as the rights of employees and consultants in Finland.

3. The Ethics: Was what I did wrong/unfair/unjustified? It's easy to conflate questions of legality and morality. This certainly is a colorful case for both aspects – if one just looks through all sides and versions of the story. I hope we can mitigate the damage for both the mission (of furthering resource efficiency) and individuals. If you haven't yet read the blog I published two years ago on the backgrounds of the story and the reasons for my decisions, reading that first might help you put these matters in context. Link below. There's an English abbreviation at the end. The story is not a simple one, and the Lunchie press releases are twisting or omitting quite a few key features of it. I'll return to the moral discussion in part 3. http://tuureparkkinen.puheenvuoro.uusisuomi.fi/210861-ceolle-fudut-tekes-paatoksen-takia-%E2%80%93-teki-paremman-palvelun-ilman-sijoittajia

Elaborated:

1. The Facts: What happened? And what does the verdict say?

a) The media has used phrases like “on anastanut mukaansa kaikki liikesalaisuudet” (“has usurped and taken with him all trade secrets”) and “sovellus oli suora kopio” (“the app was a direct copy”). This easily sounds like someone ctrl-C-ctr-V’d a bunch of source code and designs, pressed the button, and rebranded it as a new service. That’s not what happened and not what the verdict says. The verdict says: “...Parkkisen on näytetty vieneen ja kopioineen konseptin ja siihen liittyvät suunnitelmat ainoastaan muistinvaraisesti...” (...“Parkkinen has been shown to have taken (with him) and copied the concept and the related plans only by memory....”). (i) So what this means is that I had seen some initial interface layout drafts for a service, and not forgotten them when engaging in competing activity. The references in the plaintiff's statements and the press articles to "product development information" ("tuotekehitystiedot") is also a misleading reference to these interface drafts. I had no access to the service's source code or such.

The “copying” means that the court considers me to have used some of the general ideas I had seen in the designs when developing another service with another team. The court concluded, based on quite a limited amount of sample evidence and witness statements, that the services were sufficiently similar to conclude the “copying” of a "concept". (ii) You can check out the current versions of the services yourselves on App Store and PlayStore. The two files that I had actually copied (from one folder to another on my own computer) were: - a list of restaurant contact information that I had collected from public sources and - a quite generic cash flow and margin calculation spreadsheet template with fictive data. I had created both on my own initiative, alone, without being given any instructions on how to make them, nor to destroy them. The most fitting analogies for these files would be “a phonebook” and a “pocket calculator.” However, the court concluded these (also) to be the plaintiff’s dearly guarded trade secrets, actually even part of the unique service concept. (iii) b) Overall, the district court pretty much bought the plaintiff’s story and framing in their harshest formulations. Also the verdict might have been influenced by quite a few “alternative facts”, which I didn’t get the chance to challenge properly in the hearings due to time constraints. It’s a long list, but as an example: files and sketches that were made by me (not just the above-mentioned two files, but e.g. process chart sketches and brainstormed and discarded pieces of copywriting) were represented as documents made by others prior to our collaboration and further proof of me "copying the whole concept and business plan". If you have time to read the verdict yourself, it’s good DD practice to take all the witness statements in the verdict with a grain of salt and compare them to each other yourself.

2. The Law: Was what I did a crime? (And if yes, what does that imply for the future?)

I was not aware of the law by which I got condemned nor any related precedents before I got dragged to the police station in April 2016. But ignorance is not a valid legal excuse. And that’s precisely why anyone conducting any kind of business in Finland would do good for themselves to understand this law thoroughly. The law reads as follows:

Rikoslaki luku 30 §5 Yrityssalaisuuden rikkominen:

“Joka hankkiakseen itselleen tai toiselle taloudellista hyötyä tai toista vahingoittaakseen oikeudettomasti ilmaisee toiselle kuuluvan yrityssalaisuuden tai oikeudettomasti käyttää tällaista yrityssalaisuutta, jonka hän on saanut tietoonsa

1) ollessaan toisen palveluksessa,

2) toimiessaan yhteisön tai säätiön hallintoneuvoston tai hallituksen jäsenenä, toimitusjohtajana, tilintarkastajana tai selvitysmiehenä taikka niihin rinnastettavassa tehtävässä,

3) suorittaessaan tehtävää toisen puolesta tai muuten luottamuksellisessa liikesuhteessa tai

4) yrityksen saneerausmenettelyn yhteydessä,

on tuomittava, jollei teosta ole muualla laissa säädetty ankarampaa rangaistusta, yrityssalaisuuden rikkomisesta sakkoon tai vankeuteen enintään kahdeksi vuodeksi

Tämä pykälä ei koske tekoa, johon 1 momentin 1 kohdassa tarkoitettu on ryhtynyt kahden vuoden kuluttua palvelusaikansa päättymisestä. (31.1.2003/61)

Yritys on rangaistava. (31.1.2003/61)”

(An official English translation can be found here, p. 127. But translations are not what are interpreted in court.) So, not very precise and lots of room for interpretation. (This is quite typical for laws.)

Also, what likely comes as a surprise to many, is that the applicability of this law or the “rightlessness” (“oikeudettomuus”, "unlawfully" in the official translation) of disclosing or utilising information is by no means dependent on having an NDA or any kind of written agreement between the parties in place.

In our case, there were no signed agreements, since the Lunchie team backed out on the discussed arrangements after almost two months of postponing the signatures. So no non-disclosure, non-compete, IPR transfer, or non-solicitation clauses, nor even a specification of the content/deliverables of the consulting project (which the collaboration was turned into).

The verdict leaves me thinking: what should I have done differently in order to be allowed to develop an alternative solution to the same problem, after the collaboration was ended one-sidedly with differences in opinions on how this kind of problem (wasted surplus food) can be effectively solved?

If I read the verdict correctly, for me to be a criminal, it was enough that I had seen initial sketches of “the unique Lunchie service concept” during some kind of collaboration, and later engaged in competing activity. It does not matter that the ResQ Club service’s designs, interface choices, technology choices, and architecture were made by the ResQ Club team from the start, mostly by the technical founders (me mainly bringing in the customer perspective). Still, the court's apparent opinion was that "I knew too much" and that I can hence be concluded to have “copied a unique concept” and utilised another company's business secrets, taken “by memory”.

If this remains as a precedent case in higher orders of court, this could mean that:

a) Anyone who has seen some initial drafts for a service or business idea in any kind of collaboration (consulting, employment, partnership, or just helping someone out with a task) with a company and ends up operating in the same industry or servicing a similar need within 2 years can be charged with “violation of business secrets” because they have “taken business secrets with them by memory” -> Since it is impossible to prove that one has forgotten what one has seen, effectively, this means an automatic 2-year non-compete clause after any employment or consulting collaboration, with a threat of a prison sentence (not just a breach penalty fee).

b) Any consultant who does not on her own initiative (i.e., without being asked to), after helping out a company, delete all new numbers, e-mail addresses, and notes added to her phone during the period of collaboration (full-time, part-time, whatnot) can be considered to be in possession of the client company’s business secrets (customer information), and can hence retrospectively be sued for utilizing them against the company, if she e.g. consults for another company in the same industry.

c) Any tool (like a basic management accounting spreadsheet template) that a consultant gives to her client proactively to use can be considered the client’s business secret (as e.g. part of their “business concept” or “business plan”), and the consultant can be sued for using the template thereafter themselves.

…without any agreements.

If Steve Jobs had lived in Finland, he could certainly have been put in prison for founding NeXT after getting ousted from Apple. He had certainly seen designs for unpublished new computers, and founded a competing company making personal computers (with a team largely poached from Apple). Jolla founders would have been f**ked had Nokia decided to pursue them based on this law. This, completely disregarding what their agreements say or don't say. This would be a societally interesting question for a journalist to investigate further – especially since I’ve heard rumors that the law on business secrets is soon to be updated, and possibly into a yet more “pro-business” (i.e. stricter, not “pro-market”) direction.

3. The Ethics: Was what I did wrong/unfair/unjustified? Did I have “a moral right” and was it “fair” to compete with (i.e., provide an alternative to) an approach I considered doomed to fail? Imho, this is a distinct question from whether I committed a crime or not, i.e., whether a competitors’ lawyers manage to convince a judge that their version of the story sufficiently fits the wordings of a criminal law. And it is a yet more nuanced and complex question. Not all legal stuff is cool, and even if the law allows condemning something, that still leaves room for individual moral judgment on whether it was “OK” or justified. Laws are drafted and interpreted by human beings. However, for us Finns, the law and the judicial system do seem to carry strong moral imperatives. The objective philosophy/idea of a market economy says: of course I had the right. “May the best approach/team/service win.” On the other hand, I, too, agree that it isn’t so straightforward on the "human level". I have never claimed the rightness/wrongness question to be black and white for this case. It has raised a lot of thoughts in me as well. I would not be OK with opportunistically fading a team on my own accord and engage in competing activity just to e.g. get a bigger ownership stake in the business (even though I’ve heard of that happening as well, and even though that might be legal). I can also see how the Lunchie team’s framing of the story makes me look fundamentally evil and rotten to the core. If their press releases represented the whole truth and nothing but the truth of the backgrounds and situation, I likely would not have made the decisions I did. There were multiple very specific factors in the nature of this case and the way the collaboration ended (which the Lunchie releases are omitting or misrepresenting) that made me conclude that I had not only the right but a responsibility to develop a working solution customer-centrically. I felt the only way to settle the disagreement fairly was to give both approaches a chance. You can read more on the factors at play in the blog from two years back. In retrospect, I can see in the Tuure of 2015 quite a lot of “ideological passion” leading to a bias towards wanting to prove his case (“walk the walk”, “show, don’t tell”...) and standing for what he believes in. Maybe I should have just submitted to the authority of "the money". Maybe I should have waited and let Lunchie fail first. How long should I have waited for that? (I was convinced the service might never be launch ready.) In any case, I highly regret the fact that a disagreement between me and two investors ended up hurting other people as well – some of them so much that revenge is almost all they could think of for two years. That’s not an achievement I’m proud of. I naïvely still hope that someday we could got the sauna and bathe this all off with a few IPAs. I can empathise with the pleasure derived from these repeating smear campaigns, but I also know that revenge is seldom a sustainable way of appeasing the soul. Many of my acquaintances have been told directly that the main objective for a long time has been to destroy Tuure. The aim of maximal damage (vs. any gain for oneself) is also signaled by the fact that there has been no willingness to discuss any kind of settlement arrangement.

The other sad part is that even though this case was against me, the Lunchie PR campaigns are inflicting some unnecessary damage on the ResQ Club service, with its awesome team working hard to solve food waste on an even larger scale. (FYI, I have been off the ResQ team since last summer.) It looks like Bytebuffet/Lunchie has decided to make sure that no Finnish company manages to make a large global impact on this front. For almost their whole existences, Lunchie and ResQ Club have had more important competitors to worry about than each other. And in the end we're all in it for the mission, right?

In this story, many parties have made inoptimal decisions out of e.g. fear, pride, or anger. There are many lessons to draw from both the legal and moral aspects here. And in general, I’ve learned more during the past three years than I ever expected.

4. Last But Not Least:

I am infinitely grateful for all the support and caring words I've received so far. Dayumm, how many awesome people! And how undeserving one can feel.

The source references:

(i) The whole paragraph: “Esitetyn näytön perusteella on myös selvää, että kyseessä on ollut uusi ja innovatiivinen palvelu, jolla ei ole ollut ennen ResQ Club Oy:n perustamista kilpailijoita Suomessa. Vaikka Parkkisen on näytetty vieneen ja kopioineen konseptin ja siihen liittyvät suunnitelmat ainoastaan muistinvaraisesti, ei kysymys ole ollut hänen ammattitaidostaan tai sellaisesta tiedosta, jonka samalla toimialalla tai saman koulutuksen saaneet tyypillisesti hallitsevat vaan spesifisestä, pelkästään Lunchie-palvelun lanseeraamiseen tähdänneestä ja siinä käytettävästä tiedosta, joka on ollut suurimalta osin peräisin muusta lähteestä kuin Parkkisen omaan ammattitaitoon perustuvasta osaamisesta.” (The Verdict, p. 24) The court concluded this despite the fact that the Verdict also states: “Sekä lain esitöissä että oikeuskirjallisuudessa esim. Nyblin (Lahti-Koponen, Talousrikokset, 2 painos 2007 s. 214) on esitetty, että yksi mahdollinen erottelun peruste yrityssalaisuuden ja ammattitiedon välillä on se, että yrityssalaisuuksien käyttämiseksi katsotaan erityisesti sellaisen tiedon hyödyntäminen, joka on peräisin aikaisemmasta työpaikasta mukaan otetuista dokumenteista. Muistinvaraisen tiedon hyödyntäminen puolestaan tulkitaan lähtökohtaisesti omana ammattitiedon käyttämiseksi. Rajanvetoperustetta ei voida soveltaa ehdottomana, mutta sille voidaan antaa merkitystä, kun pyritään arvioimaan, mikä tieto on omaa ammattitietoa ja mikä toiselle kuuluvaa yrityssalaisuutta.” (The Verdict, p. 24-25)

(ii) “Käräjäoikeus toteaa, että kirjallisista todisteista, erityisesti Lunchie- ja ResQ-palvelujen vertailusta ja prosessikaavioiden vertailusta sekä asianomistaja Klixin ja todistaja Vähäkuopuksen kertomuksista käy ilmi, että Lunchie- ja ResQ -palvelut ovat toiminnaltaan, liikeidealtaan, ulkoasultaan ja logiikaltaan käytännössä täysin samanlaisia palveluita. Vähäkuopuksen kertomuksesta ilmenee lisäksi, että tietokantasuunnitelma ja rautalankamallit, jotka mallinsivat palvelun toimintaa oli kopioitu suoraan ResQ Club palveluun. Vähäkuopuksen mukaan Parkkisella oli ollut pääsy näihin malleihin hänen ollessaan Bytebuffet Oy:n palveluksessa.” (The Verdict, p. 24) (Note, the origin and nature of the mentioned process charts was represented untruthfully in the hearing.) (iii) "Asianomistaja on oman rangaistusvaatimuksensa teonkuvauksessa esittänyt, että Bytebuffet Oy:n yrityssalaisuuksia olisivat olleet Bytebuffet Oy:n palvelukonsepti ja liiketoimintasuunnitelma kokonaisuudessaan, erityisesti tuotekehitystiedot ja -suunnitelmat, mukaan lukien CRM-lista sekä kate- ja kannattavuuslaskelma." ... “Syyttäjän syytteessään esittämät CRM-lista ja kate- ja kannattavuuslaskelma sisältyvät tähän asianomistajan rangaistusvaatimuksen tarkoittamiin Lunchie-palvelukonseptiin ja kaikkiin siihen liittyviin suunnitelmiin.” (The Verdict, p. 20) The plaintiffs claimed that the two files contained a lot of their own private contacts and that I had merely compiled previously gathered information, but were unable point out any such bits of information that they would have contributed. The current CEO could not explain how the cash flow template worked or what it did, despite claiming to still use it continually. They also claimed the files to reflect the company’s strategy, technology choices and earning model. The files had nothing to do with technology choices, the strategic reflections were far-fetched, and the earning/pricing model assumed in the template (a percentage commission) was my initial suggestion, which was opposed (and including takeaway packages in the model was one of the reasons I got fired).

Helsinki, Finland

©2017 by Tuure Parkkinen